Politicians have a check in one hand and noose in the other for broadcasters.
It is a presidential election year — the quadrennial event that all broadcasters look forward to with great relish. For many broadcasters, it is their version of “Black Friday” — a day given its name because retailers, after spending all year in the red, look forward to the day after Thanksgiving to kick off a month that typically provides one-quarter to one-third of the entire year's sales and all of the year's profits. For broadcasters, an election year represents an enormous opportunity for ad sales for political commercials and, in recent elections, even the purchase of entire blocks of time by a candidate or their campaign committee in order to maximize face time opportunities to sway voters and sling mud.
Each successive election seems to rise to new heights of campaign spending. President Obama and the Democratic Party have a stated goal of raising a $1 billion election campaign war chest. Surely, the Republican Party will not be outdone and is certain to be as equally as aggressive with its targets. This is all music to broadcasters' ears, as much of this war chest money will be spent for ads and air time. Having spent most of my career as a technology provider, I know from experience how vendors also look forward to presidential election years as increased revenues to broadcasters mean higher capital budgets and increased equipment purchases. It's a winning time across the industry.
One might conclude, then, politicos and their campaigns are good and will make us profitable. Right? Well, wait just a minute. Aren't these the same politicians who lust after our frequency allocations? That broadcasters will lose additional frequencies is a foregone conclusion. The only discussion is how much will be lost and what will remain to be sardined into. So, the politicos show up with campaign spending money in one hand and a noose in the other — campaign money to spend on air time and a noose to tighten around that spectrum windpipe until it is all but closed. In pondering this relationship of such strange bedfellows, from a broadcaster's perspective, one cannot help but to recall a paragraph opening line from Charles Dickens' “A Tale of Two Cities”: “It was the best of times, it was the worst of times.”
The spectrum grab romp in Washington is an interesting one to watch. With a former FCC chairman on the board of a company contracted by the current FCC chairman to consult on incentive auctions, it would appear that broadcasters aren't the only ones with “networks.” But, of course, it is not just limited to broadcast; the Washington “old boys” network stretches far and wide, and encompasses both political parties. We have a former FCC chairman who is now the president and CEO of the NCTA, with another former chairman on the board on Intel. Commissioners seem to do pretty well also. Not four months after voting in favor of the takeover of a major broadcast network by one of the nation's largest media conglomerates, a commissioner accepted a position as a government affairs executive for that very same media conglomerate.
Certainly, the broadcast community had its opportunity for a “network” connection. When Eddie Fritts ran into an unhappy TV board in 2005, he was forced out and was replaced by none other than the head of the National Beer Wholesalers Association. You can't make this stuff up. Wow, what a great fit that was! Predictably, it wasn't long before the brew went flat, and the NAB had another shot at bringing in a new leader. At least this time they went for a Washington insider and a former senator. But, given the loggerheads relationship between broadcasters and the FCC in recent years, one wonders why not play the Washington game to its fullest and try to attract a former FCC chairman to the spot. Gee, in a crunch, perhaps even just a former commissioner might have considered taking the job.
Well, it is a democracy. Washington will always be Washington, and politicians will always be politicians. As one of my heroes, Winston Churchill, famously stated in a speech to Parliament: “Democracy is the worst form of government, except for all those other forms that have been tried from time to time.” Here's hoping your incentive auction check is a large one.
Anthony R. Gargano is a consultant and former industry executive.
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